Independent Schooling Helps Bridge Gender Pay Gap

For all the gains feminism has brought women, true equality, particularly in the workplace, remains elusive.

Women make up almost half of university graduates and enter the workforce in equal numbers to men yet they earn less and climb the corporate ladder much more slowly, if at all.

On the bright side, things are changing — albeit very slowly. The release of the Gender Equality Scorecard this week revealed that women earn 23 per cent less than men but that figure represents a gain of 1.6 percentage points in the three years since the first Scorecard was released.

In actual dollar terms, the earnings discrepancy between female and male full-time employees in the 2015-16 financial year amounted to almost $27,000. That’s the approximate price of a brand new base model Toyota Camry.

Worse yet, the data, compiled by the federal government’s Workplace Gender Equality Agency, shows that the pay gap widens as the work gets more demanding with women in senior management roles earning almost $100,000 less annually than their male colleagues.

However, with less than 30 per cent of “key management personnel” being women, equality of opportunity seems to be an even greater problem than the unequal financial outcomes women face.

So, what can concerned parents do to improve their daughters’ financial and professional prospects? One time-tested avenue is schooling, specifically independent schooling.

Australians with private school educations are significantly better off in terms of lifestyle, happiness, and life-time earnings.

These are the findings of a new study conducted by Associate Professor Mike Dockery of Curtin University’s National Centre for Student Equity in Higher Education.

Analysing data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, the 2016 report Does Private Schooling Pay? found that it does indeed, with graduates of independent schools earning 15 per cent more per hour than Australians who attended government schools.

For women the wage premium is even greater — a whopping 19 per cent — and they are far more likely to be employed than their state school counterparts.

The income differential enjoyed by private school alumni can be largely attributed to the increased likelihood of these students completing a university degree, Dockery explains.

Almost half of independent school graduates attain degrees whereas less than a quarter of those who attended public school are similarly qualified.

“It seems likely that there is a causal relationship in which attending a private school increases the propensity to enter university, which in turn contributes to higher wages,” he says.

Perhaps most intriguing, is the persistence of the independent school wage premium into the 21st century. Dockery compared the earnings impact of school sectors on two groups — those born before 1970 and those born after — but found that the trend held for both groups.

“Cohort analysis shows these premiums have remained relatively stable over time, despite rising levels of Year 12 completion and higher education participation,” Dockery says.

While completion rates were once quite low in government schools, “now that a much higher proportion of all students finish Year 12, that ‘advantage’ of private schools is less pronounced, and one would have expected effects on labour market outcomes to similarly have diminished,” Dockery says.

“Overall, the results suggest that private schooling continues to be an important mechanism by which socio-economic advantage is transmitted between Australian generations, largely due to enhanced access to higher education.”

In addition to bigger incomes, graduates of independent schools tend to settle in wealthier suburbs and enjoy greater levels of happiness.

“The privileges associated with having attended a private school extend to employment status, wages and household income, neighbourhood socio-economic status and self-assessed health and life satisfaction,” Dockery says.